SXSW 2013: Spotify predicts a 'decent living' for artists

March 13, 2013|By Todd Martens | This post has been corrected. See note at the bottom for details.

Spotify's Daniel Ek. (Spotify )

AUSTIN, Texas – Tuesday afternoon at South by Southwest was dedicated to electronic mavens and digital gatekeepers, arguably the new rock stars of the music industry in 2013.

Spotify founder Daniel Ek was given a space at a 2,400-capacity auditorium at the Long Center for the Performing Arts for an interview, while later, electronic artists Deadmau5 and Richie Hawtin spoke while hundreds were locked out of their panel at the Austin Convention Center.

“Your best bet is to watch it when it’s online in about a month,” said a SXSW staff member to those of us near the back of the line. Instead, we settled for a TV feed while Hawtin and Deadmau5 shared pro-tips about the technology that shaped their careers. Spotify’s Ek, meanwhile, spoke of the digital revolution as one that is fueling “a new age of renaissance in creativity,” speaking in grand terms as if he were Walt Disney and Spotify were his key to the Magic Kingdom.

It wasn’t just the music industry that Ek saw Spotify transforming. Spotify, which allows users to listen to music on-demand via a free model with ads or a subscription service without them, now boasts 24 million users worldwide. Of that figure, 6 million are paid subscribers. It’s the former number Ek is trying to increase.

“My goal is to not just convert the 24 million into buying [a subscription],” Ek said. “My goal is to get 1 billion using streaming services rather than a piracy service."

Doing so, said Ek, would create a large ecosystem in which “an artist will make a decent living again.” It was one of the only moments during the hour-long talk that recent controversies surrounding Spotify (such as whether a pennies-per-stream model could sustain an artist’s career) was brought up. Ek noted that Spotify will be paying out half a billion dollars to labels this year, and it was briefly alluded to by Ek and moderator Steven Bertoni that artists unhappy with their Spotify payouts should revisit their label contracts.

Just three years ago, Ek came to SXSW defending Spotify, and many doubted whether the service would ever launch in the U.S. Now, Ek spoke of a music utopia where artists will spread faster from culture to culture and more affordable technology will grant more power to the truly gifted.

“Twenty years ago, you had to learn how to play an instrument really well to learn how to play music,” Ek said. “Nowadays, it’s hard to be a great DJ, but most of us can be a DJ and can make good music that’s good enough to at least play in front of our friends … The tools to actually create music have become so cheap that anyone can do it, but that doesn’t mean anyone ‘can’ do it. The value of the true creative geniuses will increase.”

But still, there will be hurdles. Ek acknowledged that it took more than two years to secure license arrangements with the major labels and said that most major entertainment companies are tied to legacy businesses -- CD manufacturing and distribution, for one -- that hamper technological progress. Ek, already a crowd favorite in Austin, elicited cheers when he criticized the television industry for not offering more a la carte services.

“I’m really frustrated as a consumer that I can’t watch whatever I want, even through I’m willing to pay for it,” he said. “What if I don’t want to watch ‘Homeland' at 9 p.m.? Or if I want to watch three episodes in a row three weeks later? Yes, I can TiVo it, but if I’m a paid subscriber, why isn't that offered to me?

“Consumers want to share and want to consume in whatever way they want to.” As an example, Ek cited subscription services centered on professional sports. Some, like MLB.TV, prevent users from watching games from teams based in the same territory as the subscriber.

Said Ek, “What’s that? That doesn’t make any sense at all. These are the type of legacy problems that need to be fixed. If they’re not fixed, the consumer will fix them for you.”

If we’re living in an era of choice, Ek predicted musicians would start experimenting more with ways to interact with the user during the creative process. Perhaps, said Ek, that would be offering a song with three different endings or using some new technology such as Google Glass.

If Ek's talk gave the panel a sci-fi bent, it touched on something briefly explored later by Deadmau5 and Hawtin, who lamented that performing their albums live can sometimes limit their freedom. The two got deep into technology in their talk -- Hawtin at one point asked Deadmau5, “Wouldn’t it be great to have an eight-channel multi-part file to get into the mix a little more?” -- but Hawtin also spoke of some of his live experimentations.